A New Pecora Commission

House Speaker Nancy Pelosi said today she’d like to form a Pecora-style commission to investigate what happened on Wall Street that perpetrated the financial crisis. Ferdinand Pecora was appointed chief counsel to the Senate Banking and Currency Committee by Herbert Hoover in 1929 but it was his work under FDR ferreting out bankers whose insider trading helped caused the Depression and those who profited from the collapse through short selling that earned him fame. His investigations led to the Securities Act of 1933 and the Securities Exchange Act of 1934.

Answering a question about oversight lessons Pelosi has drawn from the crisis, the Speaker told an audience of about 350 Commonwealth Club members gathered at the san Francisco Intercontinental Hotel for an event on the Speaker’s new book, “Know Your Power:”

Before I came here I was on the phone with the Secretary of the Treasury who was informing me of some issues and I said to him that as I’ve traveled during this two-week district period… People are very, very unhappy about these bailouts, I mean it is something just so tangible across America… Seventy-five percent of America, at least, want an investigation into what happened on Wall Street… They just want to know. So what I told the secretary this morning was what will happen on Monday, what I want to initiate is the equivalent of what happened in the 30’s. They had something that was called the Pecora Commission. This was the commission that was formed when Franklin Roosevelt took office and they investigated what happened with the markets… We need to know. Some people can tell you one piece of it. Others can tell you another piece of it. But really it’s very hard – do you understand it? — for the American people and the rest of us as we try to make policy as we go forward to see the ramifications of any of the changes we’re being asked to make. So we’re going to have a commission of sorts, even if it’s a commission just in the House of Representatives in order for us to make the right decisions for us to go forward, we need to have a clearer understanding as to how we got here and what the exposure is to the tax payer in all of this.

Pelosi’s office clarified after the event that she didn’t mean to specify Monday, just that she will work with the relevant members such as House Banking Committee Chairman Barney Frank, next week to launch such an effort.